US granted exemption from global minimum tax deal on multinational profits

“The Daily Baku” reports that, nearly 150 countries have signed on to the plan, finalised by the Organisation for Economic Cooperation and Development (OECD), which was originally designed to impose a 15% global minimum corporate tax. However, under the revised agreement, large US-based multinational companies will not be subject to the minimum tax, following negotiations between the Trump administration and other G7 nations.

OECD secretary general Mathias Cormann described the outcome as a “landmark decision in international tax cooperation”, saying it would increase tax certainty, reduce administrative complexity and help safeguard national tax bases.

By contrast, US treasury secretary Scott Bessent hailed the exemption as “a historic victory in preserving US sovereignty” and said it would protect American workers and businesses from what he described as extraterritorial taxation.

The revised deal significantly weakens the original 2021 agreement, which was intended to curb aggressive tax planning by global corporations such as Apple and Nike. Under that framework, companies were to be prevented from using complex accounting structures and legal loopholes to shift profits to jurisdictions with little or no corporate tax.

Such tax havens typically include places like Bermuda and the Cayman Islands, where multinational firms often report large profits despite conducting minimal real economic activity.

Donald Trump had strongly criticised the 2021 deal, negotiated under the Biden administration, arguing that it should not apply to the United States. His administration later threatened to impose retaliatory taxes on countries that sought to levy taxes on US companies under the original agreement.

Former US treasury secretary Janet Yellen was a central architect of the 2021 OECD deal and had made the introduction of a global corporate minimum tax one of her flagship priorities. At the time, congressional Republicans strongly opposed the plan, warning it would undermine US competitiveness in the global economy.

In June, the Trump administration reopened negotiations after Republicans in Congress rolled back a so-called “revenge tax” provision from Trump’s major tax and spending legislation. That provision would have allowed the US government to impose taxes on foreign-owned companies and on investors from countries deemed to be applying “unfair” taxes to US firms.

Tax transparency organisations have sharply criticised the revised OECD agreement. Zorka Milin, policy director at the nonprofit Fact Coalition, warned that the deal could undo years of progress in global tax reform.

“This agreement risks wiping out nearly a decade of international progress on corporate taxation, while allowing the largest and most profitable American corporations to continue parking their profits in tax havens,” Milin said.

Tax watchdog groups argue that the global minimum tax was intended to halt a long-running international “race to the bottom” on corporate taxation, which has encouraged multinational companies to book profits in countries with the lowest tax rates rather than where real economic activity takes place.